Update On Reducing Benefits In Federal DB Pension Plans

On July 19, 2012 OSFI issued its final Instruction Guide – Authorization of Amendments Reducing Benefits in Defined Benefit Pension Plans, which replaced the previous April 2006 version. The Guide sets out the factors and specific requirements (e.g., valid amending power – unilateral or mutual by affected groups, legislative compliance, options considered, plan viability and rationale, individual notice and member representations, etc.), that OSFI considers when reviewing an application under s. 10.1(2)(a) of the PBSA seeking Superintendent authorization of a plan amendment that reduces,

• pension benefits,
• pension benefit credits, or
• an immediate or deferred pension benefit